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Obama Renews Emphasis on Budget Cuts, Economy

Associated Press
Saturday, 6 Jun 2009 | 6:29 PM ET

President Barack Obama wants agencies to lay out specific goals for economic stimulus spending over the next several months, a push to focus more on his $787 billion recovery plan.

President Barack Obama
Photo by: Pete Souza
President Barack Obama

Obama and Vice President Joe Biden will discuss a renewed emphasis on reviving the economy with Cabinet members during a White House meeting Monday.

In the wake of reports the recession could be subsiding, Obama wants to stress that agency heads should make economic recovery a priority during an expected jump in federal stimulus spending this summer, administration officials said. They spoke on condition of anonymity because they were not authorized to comment publicly on the plans.

Biden told reporters Friday the administration would "ramp up" recovery efforts. His comments came just hours after the government announced that the unemployment rate for May was 9.4. percent, the highest in more than a quarter-century.

Fewer jobs were lost than expected, but Biden said the White House won't be satisfied until monthly reports show jobs were being added.

Obama's recovery spending isn't likely to satisfy Biden's hopes, although it should be credited with reducing the number of layoffs, said Ken Simonson, an economist with the Associated General Contractors of America.

The construction industry is among the hardest hit by job losses, including steep drops in heavy construction and civil engineering work that relies on private and government spending. Federal stimulus spending has helped stem job losses, but not enough to make up for cuts in private investment and state and local spending, Simonson said.

Obama's stimulus program has been criticized by congressional Republicans who argue it does too little and comes too late to revive the economy, and will do more long-term damage by increasing government debt.

A Congressional Budget Office report last week noted that only $24.5 billion of the $787 billion in federal recovery money had been spent as of May 22. That figure was disputed by some who say the report didn't consider billions in state stimulus projects under way that will be reimbursed with federal money.

Transportation officials have approved more than $15 billion for 4,050 road and bridge projects across the country, signing off on stimulus work nearly twice as fast as the traditional highway project, agency spokeswoman Jill Zuckman said.

Some contractors said last week that stimulus projects could move more quickly with changes in the "Buy American" rules they must follow. The provision gives priority to U.S. iron, steel and other manufactured goods for use in public works and building projects funded with recovery money.

Some projects are delayed, waiting for waivers or confirmation that equipment qualifies, contractors said.

Michael Welch, president of BRB Contractors in Topeka, Kan., said a $2 million piece of equipment he needs for a stimulus job would cost 30 percent more if he bought it from an American company, so he's waiting for approval to move forward with the cheaper, foreign product.

"We're having problems getting any of the people up the line of command to make a decision as to whether or not this is OK for us to go ahead and buy this thing," Welch said.

In some cases, states are to blame for delayed release of federal stimulus money. The education department, for example, has cleared $44 billion for schools but only $4.9 billion has gone out the door because states have been slow to apply.

Education Secretary Arne Duncan said last month he is not concerned about the unexpected delay. Much of the money is expected to go out this summer as states apply by the July 1 deadline.

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